The exercise covers about 394 entities, including 117 located in states along India's land borders, and 36 professionals who issued certificates relating to the remittances. The tax department said the verification would focus on shell entities, the persons behind them and professionals who issued Form 15CB certificates for the overseas transfers.
According to the I-T department, the action follows the uncovering of a nationwide network of entities allegedly involved in remitting funds abroad. The network came to light during a search operation targeting a group of fictitious charitable trusts allegedly engaged in providing accommodation entries against bogus donations and contributions.
Firms Reported Tiny Turnovers but Remitted Large Sums Abroad
Preliminary ground verification found that several entities that had made substantial overseas remittances over the past three years were either non-filers of income tax returns (ITRs) or had reported very small turnovers, the department said.
The reported business activity, it added, appeared to have no correlation with the amounts being sent abroad.
The department also found that the stated purposes of the remittances, including freight payments, software imports and consulting services, did not appear consistent with the actual business activities of the entities.
Ground-level intelligence further indicated that some of the entities were not operating from the addresses declared by them, raising questions about their actual existence and the transactions undertaken in their names.
The tax department's verification exercise will seek to establish the nature of these entities, identify the individuals controlling or benefiting from them and examine the underlying transactions through which money was transferred overseas.
Small Group of Professionals Issued Large Number of Form 15CB Certificates
The data analysis also identified a concentration of form15CB certificates among a relatively small group of professionals, while the foreign remitted funds were received by a clustered group of entities.
This pattern has prompted the department to examine whether adequate professional due diligence was carried out before the certificates were issued.
A form15CB certificate is used in the context of specified foreign remittances and requires the accountant certifying the transaction to examine its taxability with reference to the books of account and other relevant documents.
The I-T department said that form15CB, read with Rule 37BB of the Income-tax Rules, 1962, and its corresponding Form 146 under Rule 220 of the Income-tax Rules, 2026, places an important responsibility on the accountant certifying the remittance.
The latest findings, however, have raised concerns over whether the underlying transactions and relevant documents were adequately examined before the certificates were issued.
Border States Also under Scrutiny
The nationwide exercise includes entities located in districts along India's land borders that had remitted significant amounts of money abroad.
Of the 394 entities covered, 117 are located in land-border states, according to the tax department.
The inclusion of such entities indicates that the verification is not limited to conventional business centres and is aimed at identifying potentially suspicious networks operating across different parts of the country.
The department is examining both the entities making the remittances and the persons behind them, along with the professionals involved in certifying the transactions.
I-T Department Stresses Professional Responsibility
The department has issued a specific caution to accountants and other professionals involved in certifying foreign remittances.
It said professionals issuing form15CB or form146 are expected to exercise 'due care, diligence and professional judgment' and properly examine the underlying transactions and relevant facts before certifying them.
The department stressed that such certifications play an important role in maintaining trust in the tax and financial system.
The exercise could, therefore, have implications not only for entities suspected of using shell structures to move money abroad but also for professionals whose certifications facilitated or supported the remittances.
The I-T department has not yet disclosed the names of the entities or professionals covered by the verification exercise, nor has it stated that the transactions identified so far are conclusively illegal. The exercise is at the verification and investigation stage, it added.
